On 10/1/2020 3:28 PM, Ken Norton wrote:
<. . .> These companies
usually operate internally on a "cost chargeback" accounting model
that somehow appears to be rather one-sided in the case history of
Olympus. Normally this isn't a problem,
It's always a problem, sometimes simmering, sometimes erupting. At it's peak, Safeway was a huge company with complex
vertical integration.
My buddy who was manager of the Dairy Division, was, in effect, CEO of the second largest Dairy business in the world.
We had one of the largest trucking fleets. We bought and sold enormous amounts of product at wholesale. Many of our
house brands were made by others. But, for example, for many years, all Dial soap sold on the west coast was made in our
plant in Oakland. Lots of National name brand frozen treats were made in our ice cream plant in Oakland. Our huge spice
plant sent out little cans and jars with several brand labels. And so on.
Allocating revenue and costs was a serious accounting adventure, often being carped about by someone or other as unfair
to them. No matter how fair and unbiased those making the decisions were, there were places where arbitrary decisions
had to be made.
Then we went through an LBO. Outside consultants were tasked with evaluating the profitability of many of our supply
operations. Plants that had long been profitable were suddenly not. I believe a few were sold to management, went on
without a hitch, selling their product to us, and making much more money than as employees.
Various backstage operations went through outsourcing, in-sourcing, outsourcing . . . Always, of course with economic
justification.
Merry Go Round Moose
--
What if the Hokey Pokey *IS* what it's all about?
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